DEBT STRUCTURE AND FINANCIAL PERFORMANCE OF LISTED INDUSTRIAL GOODS MANUFACTURING FIRMS IN NIGERIA
Abstract
This study investigated the effect of debt structure on financial performance of listed industrial goods manufacturing firms in Nigeria. The specific objectives were to determine debt structure dimensions (short-term debt and long-term debt) on financial performance measures (return on assets and return on equity) of listed industrial goods manufacturing firms in Nigeria, and evaluate how risk committee moderate the relationship between debt structure and financial performance of listed industrial goods manufacturing firms in Nigeria. The study adopted positivism philosophy and ex-post facto research design. The population of the study consists of twelve (12) industrial goods manufacturing firms listed on the Nigerian Exchange Group were sampled to six using purposive sampling technique. The data used in this study were sourced from annual reports and statement of accounts of the selected companies. This study employ descriptive statistics and Panel Least Square (PLS) estimate using panel data from 2015 to 2024 covering a period of ten (10) years for eight listed industrial goods manufacturing firms. The study result disclosed that the effect of short-term debt on return on assets and return on equity of listed industrial goods manufacturing firms in Nigeria is significant, the effect of long-term debt on return on assets of listed industrial goods manufacturing firms in Nigeria is significant, and amongst others. Based on the findings, the study concluded that effect of debt structure on financial performance of listed industrial goods manufacturing firms in Nigeria is significant. It was suggested amongst others that to curb the significant effect of debt financing on financial performance, the management of the listed industrial goods firms should maximize the functions of the risk committee formed to measure the risks involved in debt financing. This would ensure the right choice of the components of corporate debt and their full utilization towards the right angle.
